If They Try To Speed Up Foreclosure, They Must Follow The Rules

14/ “STRICT COMPLIANCE ON FORECLOSURE”:  Minnesota allows borrowers and lenders to agree to speed up a foreclosure process if it is necessary with a “foreclosure by advertisement” instead of regular foreclosure through a judicial process.  Borrowers still have many protections, but the process is faster.

Doris Ruiz bought a duplex in Minneapolis in 2005.  Her mortgage included the required consent to a “foreclosure by advertisement.”  As the housing bubble swelled and burst, her mortgage was sold several times.  By 2010, her latest lender began a “foreclosure by advertisement.

The duplex was purchased by the latest lender at an auction in 2010.  Ruiz sued with a complaint that the lender had not meticulously followed the required steps for a “foreclosure by advertisement.”  On one of the required notices, the lender was listed as the assignee “1st Fidelity,” rather than “1st Fidelity Loan Servicing, LLC.”  Although the lender hand-delivered another required document to the County Recorder on the required date, its agent did not wait for confirmation that the document was recorded, and it was not recorded for four more days.

Ruiz saw her complaint be dismissed by the district court.  She won in the Court of Appeals.

The unanimous Supreme Court revived her claim and sent it back to the district court for consideration. 

“Minnesota’s foreclosure by advertisement statutes require strict compliance and that a foreclosing party’s failure to strictly comply renders the foreclosure void.  Because 1st Fidelity did not strictly comply with the law, we affirm the decision of the court of appeals and remand to the district court for further proceedings.”


READ THE FULL CASE DECISION: 

Doris Ruiz, Respondent, vs. 1st Fidelity Loan Servicing, LLC, Appellant.

April 17, 2013                      2013-045          

https://mn.gov/law-library-stat/archive/supct/1304/OPA111081-0417.pdf